Crude commodity market Trading overall bias stays bearish as supply side problems globally and cues over weaker set of inventory data from the US continues to haunt the broader trend for the commodity. However, we believe, markets face some risks as the commodity might give good pullback before sliding further. WTI has slumped around 10-12% in October, whereas other major developments in the likes of some cyclones formation around the gulf region in the US meanwhile Iraq and other countries calling for cut in OPEC output might support the commodity against fresh slump from these levels.
US faced the Hurricane Gonzalo last week, wherein the same moved towards Bermuda on Friday as a Category 4 storm with almost nil landfalls in the US. However, in case we get some changes in weather pattern in coming day’s it could act positively for Crude as oil refineries in Gulf coast make for around 40% of total refinery capacity and also the region is house to some decent oil exploration capacity. Secondly, we are having WTI November contract expiry on Tuesday which is surely seen producing some volatility in the commodity as also seen in the case with Brent on Thursday, this week. In fact the technical analysis is suggesting oil may rebound as the same has reached to an oversold phase. Also oil related equity stocks have plunged heavily globally so any interest for buying might also help the underlying to rebound. We recommend buying oil in intraday on small dips.Crude oil prices in the international and domestic markets recorded huge fall in the current week as well, with major oil benchmarks i.e. the Brt and the WTI moving further deep into bear market territory as supply side pressure continued whereas economic cues mainly in EU and China still remained a concern
Global Market View: Let us begin the week with a fresh note. The markets are mostly calm this morning. From the global currency front to equities and commodities most of them are trading steady. We have no major economic data today except a few like Germany PPI number and the Euro-zone Current account balance with no data from the US.
There are no major changes seen in NG as US EIA last week said NG stocks rose by 94 BCF in the week ending Oct 10, higher than market expectations of a drop around 91 BCF. Total working gas storage moved to 3.299 Trln CF with the deficit reducing down to the just 10% as compared to last 5 year average. Weather continues to take a big tool over prices. As per NatGasweather, cool air will sweep through Midwest and Northeast in the coming week driving moderate heating demand however rest of the US will be relatively comfortable with limited demand for heating or cooling for most part of the week. Overall we hold selling bias in the commodity on pullbacks
Sell Silver Mcx Dec below 38450 SL 38680 Tgt 37950
Buy Crude Mcx Nov above 5060 SL 5020 Tgt 5160